Earlier this month, Alexium announced details of our upcoming Extraordinary General Meeting(EGM), scheduled for 8 May in Sydney. Included on the Meeting agenda is a resolution to ratify the issue of any future shares under the convertible note that was issued by Alexium in September 2017. We have received inquiries over the last several days asking for clarification around a few points relating to this note. To provide clarity regarding our debt facility and ensure all of our shareholders are well informed, we have answered several of the most frequently asked questions below:

Q: How did Alexium decide on GPB Debt Holdings II LLC (GPB)?
A: We reviewed several offers from reputable firms before making a decision. GPB is a large New York-based firm with a core focus on Debt Strategies and senior secured lending. In addition to offering terms that best suited Alexium’s needs, they came recommended to us by our US advisors, Noble Capital Markets, Inc.

Q: Can you describe the conversion conditions of the debt facility?
A: Alexium’s debt facility is only convertible under a change-of-control transaction. There are no conversion conditions that are related to market, economic, or operational conditions of the business (see Section 7 of the “Key Terms of the 2017 Convertible Note” table included in the 5 April Letter to Shareholders for more details).

Q: If conversion occurs, how many shares would the note convert into?
A: If a change of control transaction occurs, the note can only be converted up to a maximum of 35,922,041 shares. This number of shares is set per the agreement and cannot increase based on share price (see Section 6 of the “Key Terms of the 2017 Convertible Note” table included in the 5 April Letter to Shareholders for more details).

Q: Can the number of warrants issued with the debt facility increase?
A: With the refinancing of Alexium’s debt in September 2017, warrant coverage was reduced to 4,255,319 shares. This number of shares is set per the agreement and cannot increase based on share price or exercise price.

Q: Is resolution 13 in the Notice of Meeting to vote on the debt facility?
A: No, the purpose of the resolution in the upcoming meeting is to restore Alexium’s ongoing placement capacity of future shares, as outlined in the note, so that Alexium can continue to have issuance flexibility.

Further to the above questions, this debt facility, together with the successful placement in December of 2017, places Alexium in a very strong financial position and on track to pursue the large growth opportunities in the defense sector and bedding market that we expect to be major growth factors moving forward. The funds from these transactions are primarily being used to:

Provide fundamental balance sheet strength ahead of anticipated customer production ramp-up and new product trial requirements in both the military and bedding sectors

Expand the product development team to support new and existing identified market opportunities for our Alexiflam® and Alexicool® platform products